Gold settled lower on Tuesday after a reading of U.S. service-sector business activity came in stronger than expected, lifting the dollar, while the euro retreated ahead of a European Central Bank meeting later this week.
Investors are closely watching U.S. data for clues on when the Federal Reserve will taper its quantitative easing program, a major driver of higher gold prices during the financial crisis.
"We've seen some quite good economic data out of the U.S., which has led to a rise in the dollar and has weighed on commodity prices, gold especially,'' Commerzbank analyst Daniel Briesemann said.
(Read more: Divided gold market awaits jobs report)
"In addition, the ECB meeting is imminent on Thursday. After the very low inflation rate published for October, there are already rumours in the market that the ECB is going to lower interest rates,'' he added. "These expectations are also helping the dollar gain ground, and weighing on gold.''